SEC Chairman Says Agency Is “On the Cusp” of an ‘Innovation Exemption’ to Allow Tokenized Securities Trading

Securities and Exchange Commission Chairman Paul S. Atkins said the agency is “on the cusp” of releasing an “innovation exemption” that would allow a limited, compliant path for trading tokenized securities on blockchain-based networks.

The remark, delivered in an April 21 keynote at the Economic Club of Washington, is the clearest official signal yet that the SEC is preparing a more permissive approach to parts of the crypto market. But Atkins’ speech was not a final rule, and the SEC has not announced an official release date for the exemption.

“And we are on the cusp of releasing what I call an ‘innovation exemption,’ which will provide market participants with a cabined framework to begin facilitating the trading of tokenized securities on-chain in a compliant fashion as the Commission works toward long-term rules of the road,” Atkins said.

Tokenized securities are traditional financial assets — such as stocks, bonds or fund interests — that are represented and traded using blockchain infrastructure. The exemption Atkins described would create a temporary or limited compliance pathway for that activity while regulators work on permanent rules.

That distinction matters. The SEC has already issued interpretive guidance on digital assets, but the innovation exemption itself had not been published as formal rulemaking as of April 27. Atkins’ speech also included the standard SEC disclaimer that his remarks reflected his own views as chairman and not necessarily those of the Commission or other commissioners.

Atkins, the SEC’s 34th chairman, was sworn in April 21, 2025, and has pushed to move the agency away from what he has described as “regulation by enforcement” and toward clearer rulemaking for digital assets.

A key step in that broader shift came March 17, when the SEC and the Commodity Futures Trading Commission, the federal regulator for derivatives markets, issued a joint interpretive release laying out a five-part token taxonomy: digital commodities, digital collectibles, digital tools, stablecoins and digital securities.

That March guidance also clarified how federal securities laws apply to a range of crypto-related activities, including when a digital asset may or may not be treated as a security. The CFTC said it would administer the Commodity Exchange Act consistently with the SEC’s interpretation, giving the guidance added significance across the two main U.S. market regulators.

Atkins framed that move as an attempt to end years of uncertainty. “Today, I am pleased to announce that the SEC’s persistent failure to provide clarity on this question is over. As we speak, the Commission is implementing a token taxonomy and investment contract interpretation,” he said in March 17 remarks titled “Regulation Crypto Assets: A Token Safe Harbor.”

The innovation exemption appears to sit alongside a broader policy package Atkins has described in speeches and media reports as “Regulation Crypto Assets,” or “Reg Crypto.” That broader effort has been presented as a proposed safe-harbor and fundraising framework for crypto assets.

Reporting in early April said the package had been submitted to the White House Office of Information and Regulatory Affairs, which reviews significant federal regulations before publication. But as of April 27, the formal rule text had not been published in the Federal Register.

Taken together, the official record shows a meaningful policy shift, but not completed rulemaking. What is already in place is the March 17 interpretive release from the SEC and CFTC. What remains pending is the innovation exemption Atkins says is near, along with the larger “Reg Crypto” package still under review.

For now, the most concrete development is Atkins’ public statement that the SEC is close to opening a limited on-chain trading pathway for tokenized securities. It is an important signal from the agency’s top official, but it is still a signal — not yet a final rule.